Our built world is in the early innings of the greatest CAPEX supercycle any industry has ever seen.

The shift to a carbon-neutral world will require us to spend an estimated $275 trillion (McKinsey) on physical assets before 2050. Of this, $51 trillion will go to buildings, where the majority will be used to retrofit existing building stock with insulation, low-emissions heating systems such as heat pumps and broad base building electrification.

We are now at the inflexion point where the annual spending towards this $51 trillion (McKinsey) is accelerating at a faster pace than ever.

Europe is leading the charge with greater scale and velocity than anywhere else due to the gradual rollout of an array of punitive regulatory initiatives, generous subsidies, one of the oldest stocks of buildings globally, and a rampant energy crisis that has not only triggered exponential energy price increases but also put a massive emphasis on our need to consume our energy more efficiently as a matter of national security.

This powerful combination of factors has significantly reduced the payback period for home energy retrofits - in some cases, from twelve years to as low as three.

The result is a tremendous surge in demand for energy efficiency retrofits, overwhelming the ecosystem of under-digitised and already saturated service providers across the continent.

For homeowners, retrofits are a painful and confusing experience. Understanding which improvements carry the greatest potential impact, navigating the financing, and coordinating installers are complicated, inefficient and analogue at best – resulting in many homeowners giving up on the process, spending much more time and money than they anticipated or can afford.

For installers, the uniqueness of every home means they waste more than 40% of the project time trying to understand the requirements before being able to make an offer to clients.

Historically, homeowners mainly conducted comprehensive (deep) retrofits at the time of remodelling work, but this has quickly changed, and retrofits are now typically staggered over time and implemented gradually and independently of the typical remodelling cycle.

In addition to the factors already mentioned, this is likely due to lowering the cost of equipment (heat pump/solar/batteries), the introduction of time-of-use pricing and the ability to tie these upgrades to the home's ultimate value.

This staggered approach to retrofits means capturing the full customer LTV requires retention throughout this journey, which takes place over years and with on and off touchpoints. Additionally, before future upgrades, an understanding of the home's energy profile, installed equipment and system performance is required to help plan the installation, provision the equipment and forecast the savings generated by the new work.

We think the winner in this market will leverage digital twin technology, IoT (ongoing equipment optimisation and energy performance monitoring), finance and performance warranties to maintain touchpoints with the homeowner over time.

This data, digital twin and ongoing touchpoints will allow a provider to actively promote additional retrofit works to the homeowner as they become financially attractive or regulatorily necessary while also simplifying the planning processes.

A/O's portfolio company Enter (formerly known as Baupal) tackles this problem head-on with a fully digital end-to-end energy audit and retrofit platform – making it easy, fast and more affordable for homeowners to upgrade their homes for greater energy efficiency.

The platform allows homeowners to book home energy audits, receive recommendations, find contractors, apply for grants, and soon will provide access to low-cost green loans, automated energy monitoring, and ongoing equipment optimisation.

Enter has emerged as the European leader in this space and will enable the more than 240 million European homes to become more energy efficient at a crucial time in history with a significantly improved customer journey.

We initially backed Enter last year whilst in stealth mode alongside our dear friends at Foundamental as part of the company's first institutional capital raise.

The company has executed with such brilliance, precision and focus since. Today, the cat is finally out of the bag, and we are thrilled to announce that Enter raised their oversubscribed Series A with a stellar group of investors, including Coatue and our friends at Target Global, Foundamental.

From the very first time we met Max, Justus and Alex, it was clear to us that they were the best team to go after this generational opportunity.

Their backgrounds in sustainable architecture and business operations balanced each other perfectly. We were also convinced by their deep understanding of the retrofit journey and the challenges customers face from their experience performing energy audits with a robust vision for retaining the homeowner over their entire retrofit journey.

Enter (or Baupal as it was known then) had primarily been bootstrapped until that point but had reached significant revenue traction in a short amount of time, which cemented our view that the Enter team was ahead of anybody else in the market.

Since our initial investment Max, Justus, Alex and the entire team have continued to show their spectacular ability to execute, develop the right product/service features and attract exceptional talent.

We couldn't be more proud of our partnership with such an outstanding and mission-driven team.

Enter has already established itself as the undisputed European leader and is growing at an exponential pace, every single month, over and over again, with a precision and consistency rarely seen before. And this is only the beginning.

As Enter launches its financing product and extends its offering beyond homeowners to include large asset managers, it will be the one-stop-shop for energy efficiency retrofit needs and capture a large proportion of the spending on these works.

The opportunity ahead of Enter is enormous, and the need for energy-efficient renovations has never been greater.

Building operations are responsible for 28% of global energy-related CO2 emissions (Green Building Council), and 75% of EU buildings are considered energy-inefficient (European Commission).

However, with stricter regulation expected, as many as 90% of today's buildings will require energy-efficient renovations by 2050, representing 240m homes across Europe. Enter will enable these to be done faster, cheaper, and cheaper to a higher standard.

That is why we were proud to participate in Enter's Series-A financing round, alongside other renowned VC firms such as COATUE, Foundamental, Target Global, and Partech. With €19.4 million, Enter will dominate this critical and rapidly growing market.

We look forward to continuing our support of Enter, and are excited to watch them make a real impact on the carbon footprint of our built world. Onwards and upwards.

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